Four numbers decide your ROAS. Find the one that’s wrong.
CPM, click-through rate, conversion rate and order value are the only inputs between an impression and a dollar. This desk traces all four down to a bottom-line return, then names the stage costing you the most.
Fix the weakest stage by 20%
—Reading a funnel properly
The chain, in full
Every campaign resolves to the same multiplication. Budget buys impressions at a CPM, impressions become clicks at a CTR, clicks survive the landing page, survivors add to cart, some of those complete checkout, and each completed order carries an average value.
ROAS = (1000 ÷ CPM) × CTR × site conversion × AOVBecause the terms multiply, a 20% improvement anywhere produces the same 20% lift in ROAS. That sounds like it makes every stage equally worth fixing. It does not, because the stages differ enormously in how much room they have and how hard they are to move.
Where the room usually is
- CPM is mostly bought, not earned. You influence it through audience breadth, placement mix and seasonality, and there is rarely more than 20 to 30% of movement available without changing who you are reaching.
- Click-through rate is creative. It has the widest range of any variable in the chain, and a genuinely better hook can double it. This is where most accounts have the largest unrealised gain.
- Landing page drop-off is usually a mismatch between the promise in the ad and the first screen after the click. Above 60%, suspect the ad rather than the page.
- Add to cart responds to price clarity, shipping transparency and social proof more than layout.
- Checkout completion below 30% almost always means surprise costs at the final step, a forced account creation, or missing payment methods.
- Average order value moves through bundling and thresholds. It is frequently the easiest lever and the most ignored.
Diagnosing rather than guessing
The tool flags the stage with the worst performance relative to typical direct-to-consumer ranges, then shows what a modest improvement to that stage is worth on your current budget. Two rules keep this honest:
- Fix one stage at a time. Simultaneous changes make attribution of the improvement impossible.
- Check volume before believing a rate. A 0.4% checkout rate across 12 sessions is noise, not a finding.
Rough reference ranges
Treat these as orientation, not targets. Category, price point and traffic source all shift them.
- Paid social CPM: $8 to $30, rising sharply in the fourth quarter.
- Click-through rate: 0.8 to 2.5% on prospecting, higher on retargeting.
- Landing page drop-off: 35 to 60%.
- Add to cart: 6 to 14% of engaged sessions.
- Checkout completion: 30 to 55%.
Why the projected ROAS will differ from Ads Manager
This model is deterministic: it assumes every rate holds exactly across the whole budget. Real delivery is not uniform, auction prices rise as you spend more, and the platform’s reported figure carries attribution inflation this calculator does not attempt to model. Use the projection to size opportunities and compare scenarios, not to forecast a specific week.
Common questions
How do I convert CPM into ROAS?
Divide 1,000 by your CPM to get impressions per dollar, multiply by click-through rate to get clicks per dollar, multiply by your end-to-end site conversion rate to get orders per dollar, then multiply by average order value. The result is revenue per advertising dollar, which is your ROAS.
Which stage should I fix first?
The one furthest below its typical range, weighted by how easy it is to move. Creative-driven click-through rate usually offers the largest available gain, followed by checkout completion, which is often a handful of friction points rather than a redesign.
Is a high CPM always bad?
No. A narrow, high-intent audience can carry a $40 CPM and still outperform a $9 broad audience, because the rates downstream are so much stronger. Judge CPM only alongside the conversion rates it delivers.
Why does my real ROAS come in lower than this projection?
Usually because the rates entered are best-case averages drawn from the strongest week, or because delivery costs rise as budget grows. Enter trailing 30-day figures rather than peak ones, and re-check CPM at the budget level you actually intend to run.
Should I use gross ROAS or contribution?
Both are shown. ROAS tells you the revenue multiple; contribution after advertising tells you whether the campaign paid for itself. Only the second one goes in the bank.